Sixth Circuit Ruling Shows Preemption is Possible in Brand-Name Drug Design-Defect Cases

6th CircuitMost product-liability claims against drug manufacturers fall into one of two categories—the plaintiff alleges that his/her injury was caused by: (1) the manufacturer’s failure to include adequate safety warnings on its label; or (2) a defect in the drug’s design. In a major defeat for drug-company defendants, the U.S. Supreme Court ruled in 2009’s Wyeth v. Levine that state-law failure-to-warn claims against brand-name drug companies are not preempted by federal law in most instances, even though (as is virtually always the case) the product bears labels approved and mandated by the federal Food and Drug Administration (FDA). Some commentators concluded that Wyeth foreshadowed a similar rejection of preemption defenses in design-defect cases. However, a December 11, 2015 decision from the U.S. Court of Appeals for the Sixth Circuit suggests that those commentators likely erred; the appeals court concluded in Yates v. Ortho-McNeil-Janssen Pharmaceuticals, Inc. that design-defect claims are preempted in most instances.

Impossibility Preemption. Explaining the path that led from the Supreme Court’s Wyeth decision to this month’s Yates decision requires a brief discussion of two intervening Supreme Court preemption decisions involving generic drug companies, PLIVA, Inc. v. Mensing and Mutual Pharm. Co. v. Bartlett. Mensing held that federal law preempts state-law failure-to-warn claims against generic drug companies because it would be impossible for generics to satisfy the supplemental labeling responsibilities sought to be imposed by such claims without violating federal law. The Court explained (as Wyeth had previous held) that brand-name drug companies are generally authorized by FDA’s “Changes Being Effected” (CBE) regulation to make unilateral label changes and then seek after-the-fact permission from FDA for making those changes. But because generic manufacturers are not authorized by the CBE regulation to unilaterally change their labels (but rather are required to display labels that precisely match those of their brand-name counterparts), any effort by a generic manufacturer to comply with state tort-law requirements by unilaterally adding new safety warnings to its product label would violate federal law. Mensing held that because it was impossible for a generic manufacturer to comply with both federal law and the demands imposed by a state-law failure-to-warn claim, the state-law claim was preempted.

In its 2013 Bartlett decision, the Supreme Court extended the impossibility-preemption rationale to a design-defect claim against a generic drug manufacturer. The state law at issue prohibited the sale of “unreasonably dangerous” products. The Court determined that federal law prevented the manufacturer from redesigning a drug to render it less dangerous because the federal Food Drug and Cosmetic Act required that it have “the same active ingredients, route of administration, dosage form, strength, and labeling as the brand-name drug on which it is based.”

Thus, Bartlett concluded, the plaintiff’s design-defect claim was barred because it was impossible for the manufacturer to comply both with federal law and any state-law requirement to adopt a less-dangerous product design. Importantly, the Court said nothing to indicate that its impossibility rationale was applicable only to generic manufacturers and not also to design-defect claims against brand-name drug manufacturers. To the contrary, Bartlett observed that “[o]nce a drug—whether generic or brand-name—is approved, the manufacturer is prohibited from making any major changes to the qualitative or quantitative formulation of the drug.”

The Sixth Circuit Weighs In. Following Bartlett, federal district courts issued conflicting decisions regarding whether the Supreme Court’s impossibility-preemption rationale applied fully to design-defect claims asserted against brand-name drug manufacturers. The Sixth Circuit was the first federal appellate court to weigh in on the issue when it released its Yates decision earlier this month. It came down decisively in favor of preemption.

Yates involved a consumer who suffered a stroke while using a birth-control patch manufactured by a brand-name drug company. The product label included detailed warnings regarding the risk of stroke. Moreover, the consumer’s prescribing medical professional testified that she was well aware that strokes were a potential risk of using the birth-control patch (albeit a very small one), that she prescribed the patch despite awareness of that risk, and that she fully conveyed risk information to the consumer at the time that she wrote the prescription. Accordingly, the consumer did not have a viable failure-to-warn claim and instead focused her lawsuit on a claim that the patch was defectively designed. She asserted that the patch as designed was unreasonably dangerous and that the defendant should have re-designed its patch so as to reduce the risk of stroke.

The Sixth Circuit affirmed the trial court’s dismissal of the plaintiff’s design-defect claim, concluding that federal law preempted the claim. It explained that “impossibility preemption” applies whenever a drug manufacturer presents “clear evidence” that FDA would have prevented the manufacturer from independently taking the steps that, the plaintiff alleges, were required of it under state tort law. The appeals court concluded that federal law “clearly preempted” the plaintiff’s design-defect claim because FDA regulations did not permit the brand-name manufacturer to make any major (or even “moderate”) changes in product design without FDA’s prior approval. Compliance with both federal law and state tort law was impossible because the manufacturer could do no more than merely request FDA approval. As the Supreme Court had explained in Bartlett, the outcome of any such request is too uncertain to permit state courts to penalize manufacturers for failing to ask FDA to approve a new formulation for a drug previously approved by the agency.

Ceasing Sales Is Not an Option. The Sixth Circuit concluded that although a decision by the brand-name manufacturer to cease all sales of its birth-control patch would have brought it into compliance with both state and federal law, the theoretical availability of a cease-selling option is not sufficient to avoid an impossibility-preemption finding. Citing Bartlett, the appeals court stated that “[t]his stop-selling rationale is incompatible with preemption jurisprudence, which presumes that an actor seeking to satisfy both his federal- and state-law obligations is not required to cease acting altogether in order to avoid liability.”

The court made clear that its preemption ruling applied without regard to the theory of liability (e.g., strict liability in tort or negligence) a plaintiff invokes in advancing his design-defect claim. The court also held that a plaintiff may not avoid preemption by re-casting his claim as a challenge to the manufacturer’s initial decision to seek FDA approval for an allegedly unsafe product design.

A Major Blow Against Regulation-by-Litigation. If other appeals courts adopt the Sixth Circuit’s reasoning, design-defect claims regarding FDA-approved brand-name drugs may soon become a thing of the past. Because brand-name companies must obtain advance approval from FDA for all but the most minor changes in a drug’s formulation, they will virtually always be able to demonstrate that it is impossible for them to unilaterally comply with a plaintiff’s proposed (and allegedly safety-enhancing) design change without violating federal law. Importantly, by applying the Supreme Court’s Bartlett rationale to a case involving a brand-name drug company, the Sixth Circuit has indicated that the preemption defense to a design-defect claim is equally available both to brand-name and to generic drug companies.

Yates does not, of course, issue a free pass to brand-name companies. They continue to face significant litigation exposure from plaintiffs who allege that their injuries were caused by drug labels bearing inadequate safety warnings. But, as Yates illustrates, cases routinely arise in which an injured plaintiff will be unable to marshal sufficient factual evidence to support a failure-to-warn claim. In those instances, the availability of a preemption defense to a design-defect claim will make a major difference in whether or not the drug manufacturer can successfully defend against a product-liability claim.

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